Question 1

Merchandise sold on credit was returned for credit and recorded with a debit to Sales Returns and Allowances and a credit to Accounts Payable. This error will cause:

Accepted Answer

A)  the net income for the period to be overstated. 
B)  the net income for the period to be understated. 
C)  the assets to be overstated. 
D)  the accounts payable to be understated. 
A)  the net income for the period to be overstated. 
B)  the net income for the period to be understated. 
C)  the assets to be overstated. 
D)  the accounts payable to be understated.

Question 2

The Bay Co. had the following transactions involving the sale of merchandise. You are to prepare the necessary general journal entries. All sales are subject to credit terms of 1/10, n/30. No sales taxes are applicable.
July 16 Sold merchandise on account with an invoice price of $5,500 to Carter and Co.
July 16 Sold merchandise on account with an invoice price of $6,000 to the Ping Co.
July 20 Ping Co. returned merchandise with an invoice price of $1,000.
July 25 Received full payment from Carter and Co.
July 28 Received full payment from Ping Co.
-Prepare the necessary general journal entry for July 16, Sold merchandise on account with an invoice price of $5,500 to Carter and Co.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

The answer of The Bay Co. had the following transactions...

Question 3

Sales Returns and Allowances is a contra-sales account.

Accepted Answer

A) True 
 B)False

Question 4

If a customer returns merchandise, the income for that period will be increased.

Accepted Answer

A) True 
 B)False

Question 5

The Milk Co. had the following transactions involving the sale of merchandise. You are to prepare the necessary general journal entries. All sales are subject to a 6% sales tax. Terms of sale were n/30.
April 13 Sold merchandise priced at $600 to James Ellsworth on account.
April 14 Sold merchandise priced at $325 to a cash customer.
April 15 Sold merchandise priced at $175 to Dana Carter on account.
April 16 Sold merchandise priced at $700 to a cash customer.
April 20 The customer of April 14 returned $50 worth of merchandise for a cash refund.
April 25 Received full payment from Dana Carter.
April 30 Paid the amount of sales tax to the state.
-Prepare the necessary general journal entry for April 14.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

The answer of The Milk Co. had the following transactions...

Merchandise sold on credit was returned for credit and recorded with a debit to Sales Returns and Allowances and a credit to Accounts Payable. This error will cause:

Sales Returns and Allowances is a contra-sales account.

If a customer returns merchandise, the income for that period will be increased.

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes:

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters

Exam 9: Sales and Cash Receipts

Merchandise sold on credit was returned for credit and recorded with a debit to Sales Returns and Allowances and a credit to Accounts Payable. This error will cause:

Sales Returns and Allowances is a contra-sales account.

If a customer returns merchandise, the income for that period will be increased.

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes:

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters